Post Office reveals the most common misconceptions about life insurance & answer whether you can get cover with a pre-existing medical condition

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  • The most common misconceptions surrounding life insurance relate to how the policy pay out works and how life assurance differs from insurance. 
  • Over one in ten of people believe it is impossible to get life insurance cover with a pre-existing medical condition
  • Providing financial security for their family is named the most popular reason for taking out life insurance. 

Just over one in ten people (12%) believe it is impossible to get life insurance cover if you have a pre-existing medical condition, according to research from the Post Office. But is that the case?

The short answer is no.

Having a life insurance policy in place can provide peace of mind that should the worst happen, your loved ones will be taken care of financially. However, if you already suffered an illness or serious medical condition you may be concerned that you are unlikely to get cover or that the policy may not pay out if your death is related to your illness

Most insurers have a list of illnesses that they consider to be pre-existing conditions; these can range from anything such as asthma and high cholesterol to heart disease and mental illnesses such as depression.

As Ed Dutton, Director of Financial Services Products at Post Office, explains while it is not impossible to get cover with a pre-existing condition, it may have exclusions attachedor may result in higher premiums.

He adds: “Life Insurance cover is by no means a ‘one solution fits all’, our lives and personal situations are all different and so your policy needs to reflect that. Our findings show that 80% of people were fully truthful about their situation when taking out their policy, which is important because the more accurate the information given when applying, the more likely it is that the policy will pay-out what is expected if the worst should happen.

It’s important for any individual considering taking out life insurance to take the time to properly evaluate their individual needs and what it is they want covered. In its simplest terms, life insurance covers your life and so will provide a cash pay out to those who may be financially impacted by your death. It’s clear the biggest issue when it comes to life insurance is the genuine gap in people’s knowledge or misconceptions about how their policy or life insurance in general works which is why it’s vital to do your homework or speak to a trusted brand such as the Post Office.”

What questions could an insurer ask? 

Anyone taking out life insurance will be asked a series of questions about their general health and lifestyle,if you disclose you have a pre-existing medical condition, you’ll usually be asked more detailed questions.

These could include:

  • How long have you had the condition?
  • Any medication you may be taking
  • Have you been admitted to hospital recently?
  • Is there any family history of the condition?

The insurer may also ask to see your medical history or GP record to help them make a decision based on your individual case.

Common Misconceptions 

The most common misconception relating to life insurance was related to how the policy pays out; with around a fifth of respondents (21%) believing that a life insurance policy allows the policyholder to withdraw money at any point to cover life events, which is untrue unless you have an investment linked life insurance policy whereby this might be possible.

Most policies only allow for a lump sum to be paid out to the chosen beneficiaries upon the policy holder’s passing. However, it is possible for the policy holder to leave alternative instructions for the pay out, such as being invested or used to pay off outstanding debts like a mortgage for example.

The research found that 53% of respondents currently had a life insurance policy in place, almost half of which (40%) were aged under 35. However, when asked to explain how the pay out of a policy to their beneficiaries worked, 18% of those with cover answered, ‘I don’t know’. This means that policy holders did not understand the steps their beneficiaries would need to take in order to claim and receive the pay-out.

This figure rose to 24% of respondents in general, regardless of whether they have a life insurance policy or not – meaning nearly a quarter of UK residents don’t know how life insurance works on the most fundamental level.

The study also revealed that around two fifths (38%) of us are unable to correctly explain the difference between Life Insurance and Life Assurance.

Other Misconceptions 

Life Insurance Covers Funeral Costs – 63% of people believed life insurance covers funeral costs as standard. Funeral costs, as well as critical illness cover, income protection are all add-ons and are often not included as standard. Post Office Over 50s Life Cover product offers a funeral benefit option but if the customer expects the pay out to contribute to funeral costs without this, that is something they would need to arrange as a private matter through a Will or alternative arrangements.

Life Insurance Won’t Cover You with A Pre-Existing Condition – While a pre-existing medical condition can make it harder to find cover, and may drive up premium prices, it is still possible to find cover.  It is important for consumers to shop around because specialist providers will have a solution for pre-existing conditions.

Life Insurance Covers You for Life – Life insurance will only cover you for a specific term, for example the length of your mortgage, and will only pay out if you pass during that time. It is possible to be covered for your lifetime, but this is life assurance or whole of life cover. Only 36% of people correctly knew the difference between the two.

Life Insurance Won’t Cover Over 50s – While your age can play an important role in what type of cover you can receive, with the older you are when you apply often meaning the higher your premium will be, it is still entirely possible to get cover later in life. Many providers, including the Post Office, offer specialised over 50’s cover.


The data comes from a survey of 2000 UK adults, commissioned by the Post Office in order to delve deeper into ‘The Nation’s Relationship with Life Insurance’ and determine how much the general public knows about life insurance.  Research was conducted January 2022.

About the Post Office

  • With over 11,500 branches, Post Office has the biggest retail network in the UK, with more branches than all the banks and building societies combined.
  • Post Office is helping anyone who wants cash to get it whichever way is most convenient. Partnership with over 30 banks, building societies and credit unions means that 99% of UK bank customers can access their accounts at their Post Office.
  • Cash withdrawals, deposits and balance enquiries can be made securely and conveniently over the counter at any Post Office; and the biggest investment by any organisation or company in the last decade is being made to safeguard 1,400 free-to-use ATMs across the UK.
  • Post Office is simplifying its proposition for Postmasters with a focus on its cash and banking; mails and parcels; foreign exchange; and bill payments
  • Research has found that visits to the Post Office help drive another 400 million visitors to other shops, restaurants and local businesses equating to an estimated £1.1 billion in additional revenue for High Street businesses.
  • 7% of the population live within three miles of a Post Office; and 4,000 branches are open seven days a week.

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